Consolidation Suggests Further Weakness For EURUSD
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July 20 2018GH
If you are following me on twitter (gregahorvatfx) then you will know that I warned about possible sideways price action on EURUSD already a month back when EURUSD bears slowed down after unsuccessful break below the 1.1500 area. It appears to be a very strong level which after-all, will give way, sooner or later. The reason is a formation of the price, which looks like a triangle here on the 4h time frame. That’s a sideways price move in five waves where price moves between two contracting trendlines. Subwaves of that structure are labeled by A-B-C-D-E letters, so it takes sometime before it’s finished, and normally the breakout occurs when a lot of traders give up on their trading calls as they got stuck in the range.
As EW analyst I assume that breakout may occur as we approach end of the month, and normally breakout is expected after wave E which we already see it underway per recent price moves. If I am on the right track then keep an eye on resistance around 1.1720-1.1750. However, keep in mind that fall below wave d swing low will be needed to confirm a continuation of a big downtrend.
At the same time, I see current triangle as final piece of a head and shoulders pattern about I discussed in our video last Friday. You can see it below.
July 13 2018 Video
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